SPANISH FORT, Ala. — Preliminary audit figures indicate Spanish Fort’s economic health remains stable due primarily to hyper-conservative financial planning and projections.

Certified public accountant Earl Blackmon with Hartmann Blackmon and Kilgore PC delivered copies of the city’s audit for fiscal year 2010 during Monday’s informal City Council work session, calling the figures solid and issuing a clean — or unqualified — opinion, the highest marks an audit can receive.

“The city’s in really good financial shape as a result of your management.

“It came in (2010) on good footing, and it’s going out on even better footing for next year. A lot of cities would like for their financials to look this good,” Blackmon said, agreeing to return to the council’s May 16 work session and provide more information after council members have had ample time to “absorb” the material.

Mayor Joe Bonner did ask Blackmon if he saw any areas in which the city could immediately improve performance.

“I can’t tell you how to run your city,” Blackmon said. “Spanish Fort is well run. The financials reflect it. Essentially, there’s been conservative financial management of this city from the beginning…We found nothing wrong.”

Specifically, the city’s financial reports are divided into three categories: government activities, the Alabama Highway 181 Cooperative Improvement District and the Highway 98 Cooperative Improvement District.

Regarding government activities, or the city’s general operating budget, the audit revealed total assets of $18.4 million in 2010, and net revenue of nearly $10.7 million.

Bonner, who called the city’s financial health “extremely healthy,” credited the past administrations for their “conservative views at a very early stage of the city’s development.”

“They set examples by not getting the city into debt which we’ve tried to follow, and in these hard times we’re in, it sure makes a difference for the present council to make the tough calls and to operate in the fashion they did so that Spanish Fort did not exceed what we brought in. That’s Spanish Fort’s salvation right now,” Bonner said.

The 181 improvement district, which includes the Eastern Shore Centre, finished 2010 strongly with total assets of $14.7 million and net assets of $5.2 million

“I’m sure the Eastern Shore Centre developers would prefer to be getting a little more rent than they’re getting, but they made a very good business decision to try working with everybody during these difficult financial times because empty stores don’t do anybody any good,” Bonner said. “I think if you look at the (national) retail sector right now, the Eastern Shore Centre folks have done a wonderful job managing their property in this crisis.”

The Highway 98 improvement district, which includes the Spanish Fort Town Center, did not fare nearly as well in 2010, however, posting total assets of $25 million in 2010, but net assets of negative  $5.7 million.

The problem with that particular development, Bonner said, is an issue of timing.

“If you go back in time and see when that center opened up, it was in and about the time the financial turn took place,” he said, noting at least one car dealership reconsidered its commitment, one big-box retail tenant filed for bankruptcy protection and the majority of restaurants that had expressed interest in the center’s build-out scrapped expansion plans due to the economy.

“We purposefully kept our projections low because of the uncertainty of the economy, because we were tracking what the center was generating with the people who were already there.

Prior to the financial meltdown, he said, projections had hovered around the center generating around $2 million annually in sales tax revenue, but city leaders quickly re-assessed the situation, shifting the target considerably lower to only $700,000.

“We still believe and think there’s a lot of opportunity for that center to become a top-notch attraction, and we have some really strong retailers with Bass Pro (Shops), Kohl’s, JC Penney and Books-A-Million. The development is solid as a rock, and it’s going to be there for a long time, Bonner said.

And the conservative budgeting process is already proving helpful in fiscal 2011 with sales tax revenue to date already accounting for 61 percent of the budgeted amount for the entire year at only the six-month mark.